"Cooling Housing Prices, Rising Equity Tapping Reshape US Market Dynamics"

The U.S. housing market over the past 48 hours shows cooling price momentum alongside unexpectedly strong lending volumes and builder incentives reshaping competition[1][3]. Mortgage rates remain elevated near the high 6s for 30‑year fixed loans, keeping affordability tight and steering buyer behavior toward discounts and buydowns[5][4].

According to the August ICE Mortgage Monitor released yesterday, mortgage originations hit their highest quarterly volume since 2022, with purchase and cash‑out refinance activity near three‑year highs, supported by record tappable home equity[1]. Cash‑out refinances made up 59 percent of refis in Q2, with 70 percent of those borrowers accepting an average 1.45 percentage point higher rate to access about 94,000 dollars in equity, lifting monthly payments roughly 590 dollars[1]. This contrasts with 2024’s depressed home sales and severe affordability strain documented by Harvard’s JCHS, underscoring that liquidity from equity, not cheaper rates, is driving activity[2][1].

Rates are still restrictive: as of August 11, the 30‑year fixed averaged about 6.74 percent, nudging higher week over week, while 15‑year eased slightly; refi rates hovered near 6.99 percent[5]. Goldman Sachs now projects an 8 percent annualized decline in residential investment in the second half, citing affordability headwinds, slower immigration driven household formation, and signs of labor market softening; they expect single‑family starts to slow and multifamily to stay muted through December[4].

On pricing and competition, the new construction premium is narrowing as builders cut prices and deploy incentives; Q2 median listing price for new homes was around 450,000 dollars versus 418,000 dollars for existing, with year‑over‑year new build listing prices falling in 30 of the largest metros, especially in the South and West[3]. Rising inventory in several pandemic boom markets is pressuring prices; analyses flag Florida metros like Punta Gorda and Cape Coral with near double‑digit declines, and expect roughly half of the largest 300 metros to see price drops by year‑end as supply builds and incentives persist[6][3].

Consumer behavior is shifting toward new builds offering affordability packages such as rate buydowns and upgrades, pulling demand from existing homes in select markets[6][3]. Industry leaders are responding by ramping incentives, tailoring lower‑price product, and leaning on buydowns to keep absorption steady despite high rates[3][4][7]. Compared with earlier 2025 reporting that emphasized scarce inventory and sticky prices, today’s landscape features stronger lending volumes from equity extraction, more visible regional price declines, and builder‑led competitive pricing to sustain sales velocity[1][6][3].

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Episode Transcript

Speaker 1 (00:00):
The US housing market over the past forty eight hours
shows cooling price momentum alongside unexpectedly strong lending volues and
builder incentives reshaping competition. One three Mortgage rates remain elevated
near the high sixties for thirty dashiar fixed loans, keeping
affordability tight, and steering buyer behavior toward discounts and buydowns

(00:20):
five to three. According to the August Ice Mortgage Monitor
released yesterday, mortgage originations hit their highest quarterly volume since
twenty twenty two, with purchase in cash out refinance activity
near three dashiear highs supported by record tappable home equity. One.
Cash out refinances made up fifty nine percent of refising

(00:41):
Q two, with seventy percent of those borrowers accepting an
average one point four to five percentage point higher rate
to access about ninety four thousand dollars in equity, lifting
monthly payments roughly five hundred ninety dollars one. This contrasts
with twenty twenty four's depressed home sales and severe affordability
strain documented by Harvard's JCS, underscoring that liquidity from equity,

(01:05):
not cheaper rates, is driving activity. Two. Rates are still restrictive.
As of August eleventh, the thirty dashiar fixed averaged about
six point seventy four percent, nudging higher week over week,
while fifteen dashier eased slightly. REFI rates hovered near six
point nine nine percent. Five Goldman sachs Now projects an

(01:27):
eight percent annualized decline in residential investment in the second half,
citing affordability headwinds, slower immigration driven household formation, and signs
of labor market softening. They expect single family starts to
slow and multifamily to stay muted through December fourth. On
pricing and competition, the new construction premium is narrowing as

(01:50):
builders cut prices and deploy incentence. Q two medium listing
price for new homes was around four hundred and fifty
thousand dollars versus four hundred and eighteen thousand dollars for
existing with year over year new build listing prices falling
in thirty of the largest metros, especially in the South
and West. Three. Rising inventory in several pandemic boom markets

(02:13):
is pressuring prices. Analyses Flat Florida metros like Ponta, Gorda
and Cape Coral with near double digit declines and expect
roughly half of the largest three hundred meters to see
price drops by year end as supply builds and incentives
persist six frogs seven three. Consumer behavior is shifting toward

(02:34):
new builds offering affordability packages such as rate buy downs
and upgrades, pulling demand from existing homes in select markets
six temps three. Industry leaders are responding by ramping incentives,
tailoring lower priced product, and leaning on buy downs to
keep absorption steadied despite high weights. Compared with earlier twenty

(02:54):
twenty five reporting that emphasized scarce inventory and sticky prices.
To day's landscape features stronger lending volumes from equity extraction,
more visible regional price declines, and builder led competitive pricing
to sustain sales velocity one six three